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tv   [untitled]    February 13, 2011 5:30pm-6:00pm PST

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limit in less than five years. apologies for the delay, the computer has about a 10-second delay in changing slides for some reason. there was an expensive search process -- extensive search process. this began in 2006 where the environment department was charged with overseeing the process of finding a new contractor through our city administrator. following that, the environment commission and be administrator coordinated public hearings in 2007. there were five of them total and a day resulted in the overarching consideration guidelines for the process which i will go through in detail. following that, there was a comprehensive rfq process where every landfill in the state of california was invited to bid.
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following that, there was an extensive process in 2009 where two finalists were able to meet the criteria and became finalists as part of this process. once a finalist was selected, a contract negotiations started in 2010. the overarching considerations that did come out of the process that i just referred to comprised of minimizing and mitigating the climate impact of any landfill contractor or landfill that we selected, incentivizing landfill diversion which is recycling and composting. finding that which would be complying with the reduce, reuse, recycle principle and minimizing the life cycle use. reducing toxins. minimizing environmental and other impacts on how the community is addressing the issues it combined with the flow
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control and legal issues and preparing for a contingency and diversifying our options. the two finalists wanted to give you a snapshot. this is off of the recology web site. they are headquartered in san francisco. they are the largest employee- owned company in the industry. they have been honored many times. they're also one of the largest 100% employee-owned companies with a substantial minority representation on its shareholders. more than five generations ago, they pioneered recycling and up to 50% of the waste stream long before cycling became fashionable or mandated by law.
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the other finalist was waste management. they're based in houston, texas. they have about 45,000 employees who are committed to to the environmental responsibility. they aren't looking to -- waste management posted a 11.7 9 billion of revenues in 2009 for their shareholders. the valuation of proposals, there was a panel that was assembled to look at these proposals. that panel was comprised of ed lee, the in our mental services director, the deputy director for our department, the department of the environment. this entire process followed all legal requirements and provide a significant opportunities and
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followed all city requirements and protocols. of course, the first and most important element reviewed was the cost. i have a number of slides i would like to go through that will show you all of the different elements that were evaluated by the panel and what was concluded. in the first slide you have is did cost comparison between landfills, this is a snapshot for 2009. there is both a column for recology and waste management and shows what was included in the bids. the host fee income also included is the transportation cost. as you will note, this was not and did out -- bid out. recology has a $30 transportation fee.
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waste management has an $18 transportation fee. this was calculated if -- was chosen and our ways was taken there by trucks, any of the additional costs are included in the cost. and this is per ton. finally, there is a total. the recology fee came out to $50 per ton. "waste management was $91. this is a snapshot with the same numbers for 2011. and number of county fees had been increased and as you will see, the cost has gone up a couple of dollars as this process went along. there is a larger -- between the
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two bids. regarding the fee analysis, a couple of points to note that the panel took a look at. historically, the alameda county fees have gone up annually where the fees in yuba county have remained stable for about 15 years. al ltd. county fees have increased by 21%. in contrast, he accounting only has a host county. i will show you a chart. if you but county was to increase their fees, they would increase their refuse rates. so that puts some checks and balances into what increases you might see. a couple of other points. total fees now total $23 per
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ton, $17.81 at austin road, and finally, if allen meeting county were to wait, all of the fees instituted since 19 -- if alameda county were to wait -- so two additional slides. these are per ton. they do not include the cost of transportation. you can see the cost comparison between the two. $66.79 per ton for waste management. including the alameda county fees, $75.54 for waste management. again, this does not include
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transportation costs. this slide, which i will not get into specifically, illustrates what the state and local government fees are in alameda county versus austin road, there are a number of fees that you can look at. the total cost to race -- ratepayers over a 10-year contracts band would be about $110 million for the one, over $240 million for waste management. this is over the 10-year period. and this is cost per city department, so all of the money that is spent by our city department on the trash, these are the costs that we would be looking at, with either of those
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two companies. and $3.70 million for waste management. these are for all of our departments. so in terms of the cost, it is a pretty straightforward analysis. the one bid is significantly less expensive. now, in terms of the environmental analysis, our panel did look at the landfills and compared the two. this was opened in 1980, austin in 1987. both are permitted and meet the subtitle standards, which are the strictest, newest standards for landfills in our country.
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it is fully lines, whereas altamont is not. -- it is fully lined. both landfills to on site methane gas recovery, and both would only be accepting our garbage. they would not be accepting sewage sludge and no organics for composting, so there was something about exactly what this contract covers catholic covers, with no composted. -- what this contract covers, with no material for composting. and there is the air force base. as you can see in terms of the environmental analysis for the landfill, they are relatively comparable. now, regarding the transportation analysis, which, again, was not bid out, both
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bidders koran or asked if the landfill site -- both bidders were asked if the landfill site met some criteria. now, some environmental considerations regarding transportation. shipping by rail is four times more fuel efficient than trucking, according to the association of american railways. this is significant because for part of the analysis, recology is planning to use trucking as well as rail to bring it to austen wrote. -- austin. the environmental science associates also put up a report that documents the results.
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these are the results. the two landfills, recology, yuba, austin, and the others, it shows the difference in carbon dioxide that would be emitted per ton of waste. 1.1 5 million -- 1.15 tons. a quite some of the result that would essentially resulted in millions of tons of carbon dioxide not emitted over the life of the contract. just to give you some context, all of our city buildings to emit 500,000 tons of carbon dioxide into the air every year.
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this is a pretty significant savings if we want truck and rail. these are the rfp panels. most of very similar. in this, recology did get a total higher score. a couple of things i wanted to address. i know you will hear more about this from the budget analyst's report. i know you are well aware of the city ordinance that allows only permanent haulers to transport waste on the streets. currently, only recology can bring this into san francisco on that road. they would be transferring the
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waste from the san francisco transfer station. for this reason, the facilitation agreement is presented with the agreement today. it does provide back up. now, a question did come up about what they are considering about separating out the facilitation agreement and putting that out. that was considered and ultimately rejected for the following reasons. if transportation were put out to bid, there would be a negative fiscal and environmental impact in a number of ways, which could possibly influence a second transfer station that would be outside of the city limits, which could cost up to -- actually more than $40 million. the estimate we received of what a new transfer station would cost, $40 million to $60 million, in fact. it would also include a 1100
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million tons per day to be transferred -- many tons to be transferred, with inefficiencies in the system. it would possibly eliminate up to 42 san francisco truck driving jobs, and it would also reduce transportation costs, which are now subject to a rate process, and we currently have access to the records and the ability to modify it any time. and then, finally, putting out the facilitation to bid would violate the overarching considerations, which means there would be negative impact. this was considered and ultimately rejected. finally, you probably will hear about reopening this process. redoing this process would take
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a minimum of two years, so if we eliminated this process, and the fastest that we could possibly do this process would be two years, but assuming that we want to include the public process, it would be a minimum of three years, so the major problem is that this would leave the city dangerously close to not having any landfill agreement in place, and the contract would be used up and could result in significantly increase costs due to the need for last-minute negotiations. we are very concerned about the position this would put the city in by being right up against the deadline. what sort of negotiating power with the city need to really get the best rates for san francisco and our rate payers? and finally and just as significantly, if there is an unforeseen event, it could be a natural disaster or some other event, that generates a large amount of landfill waste, the city would not have a contingency plan in place.
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we assume we have about five years left on our current kondracke. we do as a city, of course, need to plan as a city, regarding our disposal in our waste. we did get to the contract phase, and through the process, recology was chosen as the preferred contractor. there is the director of the department of public works, the deputy director for our department, and also tom owen, a deputy city attorney. and just in summary, the proposed recology contract that is before you for consideration is for the life of the contract. waste would be transported to the east bay and then to rail to
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the ostrom landfill. however, if the city meets our set -- our goals, the contract value could be less than $50 million because the tonnage would be, of course, reduce. so, finally, the department of the environment is recommending that approval of the draft landfill contract as well as the facilitation agreement with recology is approved. we do believe it is the best option for the city and county of san francisco, and i am very proud of the extensive work that has been conducted by the panel, the contra negotiators, as well as the department over the next few years. i am confident that you will see this is a competitive contract, and it really is a great deal
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for san francisco. i am happy to answer any questions, and we have a number of staff and are happy to answer any questions, as well. chair chu: i know there are a number of people who would like to talk, but if we can have patience, and we will go to the budget analyst. >> madam chair, members of the committee, supervisor campos, as you know, the proposed resolution before you would authorize the department of environment to enter into a new landfill disposal agreement with recology beginning in 2015 and extending up to 10 years, designating recology's ostrom road landfill as the exclusive side, allowing the waste in san francisco to be deposited in the landfill. the proposed resolution would also have an amendment to the
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existing facilitation agreement between the department of environment and recology, which authorizes them to continue to transport it to a new landfill site in yuba county and transport such refuse primarily by rail instead of the current exclusive trucking message. the city currently has an exclusive landfill agreement with waste management out to the landfill in leavenworth, which allows for the deposits of up to 50 million tons of refuse in that land fill site. the department of environment anticipates that the capacity will be exhausted by 2015, at which time the existing landfill disposal agreement with waste management will expire. the department of environment is now requesting after having conducted a competitive bid process with a new landfill disposal agreement between many parties, that'd be awarded to recology for up to 5 million
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tons in san francisco to the ostrom road site in new county beginning in 2015 for up to 10 years. -- in yuba county. the department of environment previously entered into an existing facilitation agreement without a competitive bidding process, which required recology to consolidate refuse at its transfer station in san francisco and then transfer such refuse at the landfill site in livermore. the term of the facilitation agreement will expire simultaneously with the existing landfill disposal agreement with waste management, and that is anticipated to expire in 2015. in order to provide continued control over the transfer and transport in handling of the city's refuse by recology the
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proposed resolution would also propose an amendment to the existing agreement with recology to begin upon the expiration of the existing agreement, which is expected to be in 2015. this amended facilitation agreement would require recology to continue to collect this at its transfer station in san francisco and transfer it at its transfer station to ostrom. supervisors, i want to point out that unlike the landfill disposal agreement, neither the existing facilitation recruitment -- agreement or the other were competitively bid, because under the city's refuse disposal ordnance of 1932, recology is the city's only
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permitted waste hauler, and as such, they are the only firm qualified to take it through the streets in the city and county of san francisco, and of quote, and transfer that waste from their transfer station in san francisco -- end of quote. the transfer station is located near candlestick park. refuse collection in the city is governed by the city's refuse collection and disposal ordinance of 1932. it was previously approved by the voters of san francisco, which requires that only permitted refuse haulers collect the refuse and transfer it through the streets in the city of san francisco. the ordinance created 97 permanent permits, which is due to a number of acquisitions since the ordinance was approved, they are currently all of and by -- they are all owned by recology, which has resulted
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in then becoming the exclusive collector without them ever having to go through their normal collective bidding process -- competitive bidding process. there is the amended agreement and the landfill disposal agreements, and there are two fees which would be paid to recology. into the ostrom road . in yuba county, and then going by rail rather than truck. -- into the ostrom road area in yuba county. the proposed two agreements are proposed to increase rates 3%. the monthly rates paid by a single family residence with a
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32-gallon waste container would increase by 82 cents, from $27.55, a 3% increase. however, supervisors, unlike waterways, charged by the public utilities, which are subject to the board of supervisors, neither residential and more commercial refuse collections are subject to the board of supervisors' approval. under this 1932 ordinance, residential refuse collection rates are subject to approval by the director of public works. if the rates are appealed, then there is a subject to the rate board, which is composed of the city administrator, the controller, and the director of the public utilities commission. in fact, unlike residential rates, collection rates paid by san francisco businesses are not subject to approval by either
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the director of public works or the rate board. so the board of supervisors, since 1932, has never been provided with any oversight authority whatsoever under the existing provisions of that 1930 to refuse and collection disposal ordinance. -- that 1932 refuse and collection disposal ordinance. in our report, it is over a $200 million agreement per year. as you know, the supervisors approved oversight in numerous contracts that come before the board. not even approaching $100 million. and this is a $206 million annual agreement. as i stated, the 1932 ordinance
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has resulted in recology becoming the exclusive refuse collection firm was not ever having gone through the normal competitive process. -- without ever having gone through the normal competitive process. huskey the budget and legislative analysts believe that such a firm should be selected through the city's normal competitive bidding process. therefore, the policy alternative for the board of supervisors include submitting the proposition to the voters to repeal the city's existing refuse collection and disposal ordnance of 1932, such that future refuse collection in transfer services would be required to be awarded by the city under the city's normal competitive process, and would require the refuse collection of both residential and commercial services to be subject to board
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of supervisors' approval, it just as water waste is subject to board of supervisors' approval. the agreement, as i mentioned, it is not subject to the competitive bidding process because the department of environment under the refuse ordinance, they alone can transfer or refuse in the city of san francisco and to transfer it from their transfer station, which is located in san francisco near candlestick park, and that means traveling through the streets of the city and county of san francisco. therefore, it may be possible for a second firm other than recology to transfer it after it has been collected by them if it is a outside the city limits or if it is located near korea or rail facilities -- near korea
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and -- marine or rail facilities. should the board of supervisors not submit this, our second policy alternative for consideration by the board of supervisors includes requesting that the department of environment analyze the potential costs and benefits of using recology but using a second, separate firm to provide refuse collection transportation collection which avoids transporting refuse through the senate -- streets and county of san francisco.

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